A STEEP analysis is a tool that helps businesses to examine external factors and use them to their advantage. In this article, we explain what a STEEP analysis is and how to conduct it. Besides, we’ve prepared some great STEEP analysis examples. Keep reading to learn more!
🔝 Top-6 STEEP Analysis Examples
- Internationalization of Business: Management Report
- IPhone 5: Operation Management and Supply Chain
- Establishing a Business in Baking Market
- NMC Healthcare Company's Mission and Vision
- Intercontinental Continental Hotel Analysis
- Impact of CoronaVirus on the Aviation Sector: Emirates Airline
📖 Definition of STEEP Analysis
First of all, let’s try to clarify what exactly a STEEP analysis is and what good it can do for a company.
What Is a STEEP Analysis?
The STEEP analysis stands for Social, Technological, Economic, Environmental, and Political. Using the STEEP analysis means identifying and analyzing each of these factors and their effect on the business in the past, present, and future.
Comparing STEEP vs. PESTLE, remember that they are both similar analysis methods, but PESTLE adds an extra section known as Legal.
Why Is STEEP Analysis Useful?
The STEEP analysis helps a business make more informed decisions while navigating influential trends, even without previous experience.
When a company needs to understand the market or discover what steps are required, this analysis will provide valuable details on current customer needs and trends as well as keep the business up to date on the current legal information.
🚀 Elements of a STEEP Analysis
The following STEEP analysis template outlines the elements required to make the analysis helpful for the business.
Social Factors
The social factors include the following key elements:
- Lifestyles,
- Education,
- Age distribution,
- Demographics,
- Religion,
- Trends.
The social aspects can cause problems with a company’s strategic plan, so it’s important not to underrate the importance of this part.
Technological Factors
The technological environment is constantly subject to change as new and innovative methods are discovered. Technological factors include:
- Communication,
- Transport,
- Patents,
- Research and development.
This innovative aspect is vital if a company needs technological advances to improve services and products or generate new ones.
Economic Factors
The economy of the world has a significant effect on a business. The economy doesn’t simply cover how well off an area is; it also looks at the following:
- Interest rates,
- Taxes,
- Marketing,
- Inflation,
- International trade.
A practical STEEP analysis of the economy helps businesses adjust their strategies accordingly.
Ecological Factors
The ecological aspect is growing in importance in the minds of consumers and businesses. It covers:
- Natural resources,
- Sustainability,
- Recycling options,
- Pollution,
- Environmental regulations.
A business needs to assess the ecological factor in their area and any area they plan on expanding into to remain legal and current.
Political Factors
The political factors of the STEEP analysis include:
- Political environments of countries and relevant regions;
- Legal factors of countries and relevant regions.
In this case, a lack of proper analysis can result in fines and bad returns on investment. It can increase the time it takes for a company to overcome legal or political barriers.
✍️ How to Conduct a STEEP Analysis
A STEEP analysis is typically conducted by a firm’s corporate level or a division. However, any individual can analyze a small business. The following steps divide the process into digestible chunks.
Understand the Elements of the Environment
Look at the business and ask questions about the environment you are examining. Analyze current key events and environmental trends and how they have evolved. Then look at how the trends impact the company.
Determine the Interrelationship between Trends
Look at the conflicts between the trends, then determine their interrelationships. What works well together and what doesn’t?
Relate Issues to the Trends
Look at all the trends and identify which of them will bolster the business and which will hinder it. Then narrow the trends list down to determine the main issues.
Forecast Possible Direction of Issues
Once the trending issues are identified, find meaning in the data gathered. This step requires looking at all you have and working out the symptoms and driving forces behind the trend.
Make a Conclusion
Draw conclusions about the effect the trends can have on the company both now and in the future. Conclusions drawn should leave the company with enough data to make effective strategic plans to improve the business.
✨ Amazon & Apple STEEP Analysis Examples
Now, it’s time to check out some examples of STEEP analysis for Amazon and Apple.
Amazon STEEP Analysis
Apple STEEP Analysis
We sincerely hope our examples helped you better understand how to conduct a STEEP analysis. Now, it’s time to try to do it yourself. Good luck!